Munich Personal RePEc Archive

Social Capital, Performance of SMEs, and COVID-19 Pandemic

Rajapakshe, PSK and Gamage, SKN and Prasanna, RPIR and Jayasundara, JMSB and Ekanayake, EMS and Upulwehera, JMHM and Wijerathna, WAID and Abeyrathne, GAKNJ (2020): Social Capital, Performance of SMEs, and COVID-19 Pandemic.

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The aim of this working paper is to explore the relationship between social capital and the performance of SMEs and articulate the ways of using the social capital as an instrument to address the performance of the SMEs in context of Covid-19 pandemic. Further, this review identifies the unexplored areas related to concepts ‒ social capital, SME performance, and Covid‒19 pandemic which will pave the way for further research in area focused. . The review and discussion on existing state of knowledge disclosed the key areas which create link between social capital and SME performance. First, the investigation of the impact of externalities on SMEs performance, especially the impact of COVID-19 pandemic, and how the social capital could assists to minimize the effect were divulged. Then, the way of allocating social capital to intensify the success of SMEs in the internationalization process was revealed. Accordingly, with the growing significance of the banking institutions during the pandemic period, investigating the banking relationship as an external social capital with the SMEs performance was recognized as one of the critical areas in the pandemic situation. Lastly, during the era of treating customers like the kings of the market, interaction among innovation, marketing capabilities, and social capital to facilitate the competitive performance of SMEs have been substantially addressed. Findings suggested that investigating the dynamic environmental changes of SMEs and social capital influence are vital to stimulate the sustainable competitive advantage of SME sector in the intensified economic competition.

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